Upbit Leads User Asset Protection with '3No Policy'

No Worries About Asset Management, Withdrawals, or Service Interruptions
"Proactive Response to Regulations for Users"

Upbit announced on the 30th that it will take the lead in creating a safe trading environment by implementing the '3 No (無) Policy (No asset management, no withdrawal worries, no service interruptions)' to protect users' assets.

As the domestic virtual asset market grows recently, regulations equivalent to those in the financial sector are being demanded for virtual asset exchanges. According to the '2023 Second Half Virtual Asset Business Operators Survey Results' released by the Financial Intelligence Unit (FIU) under the Financial Services Commission, the transaction volume of the domestic virtual asset market reaches 649 trillion KRW, and the number of transaction users is 6.45 million. The Korean won deposits of virtual asset operators have also continuously increased since last August, reaching 4.9 trillion KRW.

In response, virtual asset exchanges are putting more effort into creating a safe trading environment. In particular, Upbit, the largest virtual asset exchange in Korea, has been proactively responding by operating the '3 No (無) Policy (No asset management, no withdrawal worries, no service interruptions)' to protect users' assets even before regulations were established.

Last year, a situation occurred where Day One Invest had problems managing users' virtual assets and was unable to return deposits. This brought the risks of virtual asset management to the forefront, and the Financial Services Commission announced that under Article 7, Paragraph 2 of the Virtual Asset User Protection Act, deposit and management businesses that entrust users' virtual assets to third parties will be prohibited going forward.

Upbit has not managed any users' virtual assets deposited during all service operations, including virtual asset trading and staking, even before this regulation was established. In particular, the staking service is 100% self-operated without involving external companies.

Additionally, since 2018, Upbit has regularly conducted audits of company-held assets through external accounting firms and publicly discloses digital asset and deposit audit reports. Upbit holds a sufficient amount of assets exceeding users' deposits, allowing users to withdraw their assets deposited with the exchange at any time.

Furthermore, Upbit is prepared for disasters such as hacking, fires, and earthquakes. According to the enforcement decree of the Virtual Asset User Protection Act to be implemented in July, exchanges must store at least 80% of users' virtual assets in cold wallets separated from the internet. Cold wallets have a lower risk of hacking compared to hot wallets connected to the internet. Upbit has stored users' virtual assets in cold wallets at a higher ratio since its inception. It also obtained the international standard certification (ISO 22301) last year, which evaluates whether operations can be maintained stably without interruption in case of disasters, thereby establishing a safe trading environment.

A representative of Dunamu, the operator of Upbit, stated, "We have implemented various policies to protect users' assets proactively ahead of regulations," and added, "We will continue to take the lead in creating a safe trading environment."